Pricing Leaders Need Their Hearts as Much as Their Heads
As I progress through my pricing career, it becomes more and more obvious to me that pricing professionals need to use and develop their soft skills just as much as their hard skills. Granted, this is not a novel observation. My MBA program was filled with regular reminders that successfully bridging the gap from technical expert to manager requires cultivating our emotional intelligence.
Still, this observation resonates just a little more for me with each passing year. Plus, this message reverberates nicely with my article from last month on the importance of teamwork in pricing.
The simple fact is that in order to improve from good to great, pricing leaders need their hearts as much as their heads. (Granted, perhaps the Venn diagram between “the heart” and “emotional intelligence” is not a perfect circle. However, there is enough overlap for me to consider them synonyms for this discussion. For those of you who think talk of “the heart” is too woo-woo for a business context, feel free to mentally substitute “emotional intelligence” for the remainder of this article.)
What is emotional intelligence?
The concept of emotional intelligence broke into mainstream thought via a 1995 book by science journalist Daniel Goleman: Emotional Intelligence: Why It Can Matter More Than IQ. Goleman argued that emotional intelligence is a critical factor for personal success, whether in your career, academics, or social life. His original work identified five major categories of emotional intelligence, which Goleman later reduced.
In a 2017 article in Harvard Business Review, Goleman identified 12 elements to emotional intelligence that exist across four categories: self-awareness, self-management, social awareness, and relationship management. At the very least, a cursory review of the elements may provide you with some insight into which elements may be lacking in your life. And all of the elements can be beneficial for personal growth, professional leadership, and pricing effectiveness.
Self-awareness has one element: emotional self-awareness. Simply put, being able to observe and identify emotions in oneself is a basic dimension of emotional intelligence. If you are not even aware of your own emotional state, it will be very difficult to channel, manage, or transmute your emotions for optimal effectiveness.
Self-management has four elements: emotional self-control, adaptability, achievement orientation, and positive outlook. I think that this can be an overlooked aspect of emotional intelligence, especially the emotional self-control element. Many times, people view emotional intelligence solely through the lens of how we can use it socially to influence or lead those around us. Personally, I think that self-management is important for the same reason that airlines advise you to put on your oxygen mask before helping those around you: you can’t help others if you pass out first. Likewise, we must learn to manage (and observe and influence) our own emotions before we can expect to influence others.
Social awareness has two elements: empathy and organizational awareness. This is where things get interesting because this is where other people get involved. I cannot emphasize enough how important empathy is for maintaining positive group dynamics. Empathy is simply the ability to walk a mile in someone else’s shoes: to effectively see things from another’s standpoint, with all their experiences, biases, and accumulated wisdom. Dialogue cannot occur without some modicum of empathy for all parties involved. If we cannot see ourselves in the other person (even in some small way), we will not be able to connect enough to truly communicate. And if you can’t even dialogue with each other, then how can you expect to effectively work as a team?
Relationship management has five elements: influence, coach and mentor, conflict management, teamwork, and inspirational leadership. For many people, the value of emotional intelligence is showcased in this category, because these are the elements that have the potential to be most transformative and impactful for a team or business. Yes, this is true. However, I think you would be doing yourself a disservice to completely write-off the prior categories. After all, they provide the foundations for you to recognize your own emotions, regulate your own emotions, and develop your own empathy for others.
How should pricing professionals respond?
OK, so I have provided you with information about emotional intelligence and its importance to advancing your career. But what is the most important takeaway? Well, I find myself back where I started: pricing leaders need their hearts as much as their heads.
Yes, we are prone to being data-driven in pricing (which we absolutely SHOULD DO), but never forget that you can’t get anything done in pricing without people. And you can’t communicate with and lead people if you don’t use your heart. There is no substitute for empathy.
Sure, you can connect with other people with your head, but you may find connecting easier (and the connections more organic) if you lead with your heart. Go ahead: give it a try!
Goleman, Daniel, and Richard E. Boyatzis. “Emotional Intelligence Has 12 Elements. Which Do You Need to Work on?” Harvard Business Review, September 15, 2020. https://hbr.org/2017/02/emotional-intelligence-has-12-elements-which-do-you-need-to-work-on.
Goleman, Daniel. “What People (Still) Get Wrong about Emotional Intelligence.” Harvard Business Review, December 22, 2020. https://hbr.org/2020/12/what-people-still-get-wrong-about-emotional-intelligence.